The controversy about the guarantees that government extended over the bank loans to cover the building of the new power station has become like the proverbial mountain out of a molehill. But not altogether.

The original agreement between the state and private interests contracted to install a power station was meant to take the “classic” format of a private-public “buy back” arrangement. Which meant that the former would invest against a promise by the latter to buy up the resulting output.

Due to EU rules governing state aid, the government could not guarantee that it would buy up the power station’s output prior to getting the go ahead from Brussels. So the banks found it difficult to extend finance to the private company involved in the deal. The state had to intervene. It guaranteed the bank loans to the company till the pending clearance arrived from the EU. Now, this is what is troublesome in the story:

We are faced here with another example of how EU rules, applied to a peripheral island like Malta, can serve to dampen economic initiative. This is happening even when such initiative is being undertaken in line with country specific recommendations that the European Commission has been making for Malta to reform its energy sector.

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TTIP

The debate in Malta about TTIP – the agreement being negotiated between the US and the EU to establish between them a zone of free trade and investments – lacks focus. In many countries a campaign is being run in favour of a quick conclusion to the negotiations. However American political realities indicate that this is likely to be difficult/

Clearly, the most to benefit from an agreement would be the major multinational companies. This is not necessarily a bad outcome, but it could be.

In recent months, the agreement’s promoters have been emphasizing how helpful such an agreement would be to small and medium sized enterprises. In Malta, beyond making generalised statements meant for universal consumption, we should concentrate on a detailed assessment of how our enteprises, which by everybody’s standards classify as “micro”, could in practice, benefit or otherwise from the agreement with the US.

Moreover, financial services, which have become a leading sector of the Maltese econmy are another matter of concern. Does the fact that the US seems disinclined to include financial services in the TTIP negotiations have any implications for the Malta side? 

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Vision

I had a curious but interesting discussion with two friends: what would they prefer to be, long or short sighted, given the impossibility to be both?

One said there’s nothing that beats long sightedness, for you can recognize how things are developing before they come too close. It so happens that he spends much time driving a car.

To the contrary, the other said: it hardly matters whether you see clearly or blurred matters taking place faraway; you need to see best what can hit you right now. Who said so happens to spend much time reading and writing.

As I reflected later, my friends might have been referring not to what we see with eyes wide open, but to some other kind of vision.